MEDIA RELEASE

David Collings - Manukau Mayoral Candidate
Manukau City Councillor (2 terms) Member, Counties Manukau District Health Board
Chair Auckland Manukau Eastern Transport Initiative

050907 - Government rates inquiry

City Councillor and Manukau Mayoral candidate David Collings has welcomed the recommendations released from the local body rates inquiry requested by central government. Mr Collings said "The panel of the inquiry have confirmed many of the things I have been saying over the last six years as a city councillor".

The main finding is that council revenue from rates is too high and it is recommended that this should only account for 50% or less of the council’s funding. After a meeting last week with Leigh Auton, Manukau City Council, Chief Executive, Cr Collings confirms that Manukau is currently running at 56% of it’s revenue from rates. In his opinion "this is far too high, and the inquiry members think so too".

"This inquiry has reported some interesting findings and those who have been told, in the past, that they are just busy bodies have now been vindicated - as in my opinion this report confirms what many have felt for years - that councils do see ratepayers as cash cows."

" I raised the issue of rates being capped at the level of inflation, around March 2004 after the council introduced a 2% average increase in rates for the 04/05 financial year . In November 2004, immediately after the election, I’m on the public record for asking why this could be achieved in an election year and then after the election it was suddenly impossible. In fact the reason that rates have been capped at a 5.9% increase each year is probably to stop myself and others embarrassing the council due to these election cycle fluctuations. I have to give credit that the council has restrained itself with a cap on rates and that members agreed not to entice voters with a low increase this year, as I feel this is a more transparent approach. However the level of the increase is still far too high for my liking and I’m sure for ratepayers right across the city. I hope to encourage the newly elected council in October that the findings of this inquiry are to be heeded."

Further comments from the inquiry include; Local government needs to show more restraint in its expenditures, to give more rigorous consideration to the desirability and prioritisation of expenditures, and a need for councils to reassess the forecast infrastructure expenditures contained in their Long Term Plans.

The inquiry also recommends that central government needs to provide new funding sources - particularly where legislation has introduced costs to local government, that there is scope for considerable reduction in or holding of rates by greater use of debt funding for long-life assets such as roading and other key infrastructure, and a suggestion that councils could fund capital expenditure from cash reserves for the funding of depreciation with no further use of debt.

Mr Collings stated that "On the whole I welcome the report and feel this will provide ratepayers an argument against council’s excessive spending, during next years annual plan consultation. I’m meeting next week with the council’s Chief Financial Officer and intend to discuss some of these issues."

ENDS

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